For Immediate Release
Chicago, IL – March 26, 2010 – Zacks Equity Research highlights Transcept Pharmaceuticals (TSPT) as the Bull of the Day and Sunoco, Inc. (SUN) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Yum! Brands, Inc. (YUM), McDonald’s Corp. (MCD) and Domino’s Pizza Inc. (DPZ).
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506
Here is a synopsis of all five stocks:
We are maintaining our positive bias on Transcept Pharmaceuticals (TSPT). We believe the stock is significantly undervalued at this level, and that the market is overly pessimistic on the ability of management to address the issues raised in the FDA’s complete response letter from last October.
From what we have seen, management has an excellent plan to answer the questions brought up by the agency and we think everything could be ready to re-file by October 2010. That puts an action date in April 2011.
With nearly $90 million in cash still on the books at year-end 2009 and a market value of only $105 million, Transcept offers enormous upside once Intermezzo is finally approved by the FDA.
We are downgrading Sunoco, Inc. (SUN) shares to Underperform from Neutral, reflecting the bearish refining margin outlook. Weak demand for refined products in the global downturn and increased capacity has squeezed margins throughout the industry.
Rising crude oil prices have added to Sunoco’s miseries by increasing the cost of production. With utilization rates remaining at historically low levels, we see a fairly unfavorable macro backdrop for independent refiners over the coming 6-12 months.
Sunoco’s lack of geographic diversification and refining flexibility has also become a major liability in our view. Given these headwinds, we expect Sunoco shares to be under pressure in the near future.
Latest Posts on the Zacks Analyst Blog:
Yum! Rings Taco Bell in India
After having KFC and Pizza Hut as successful brands in India, Yum! Brands, Inc. (YUM) is now focusing on developing Taco Bell as the third brand in India. As a part of its strategy, the fast food restaurant operator opened the first Taco Bell restaurant in Bangalore, India.
The sluggish sales in the U.S. have prompted Yum! to focus more on emerging markets, such as India, which still remains untapped fully. The company remains confident about the success of Mexican-inspired quick-service restaurant brand, whose menu features tacos, burritos, nachos, quesadillas and Crunchwraps with menu pricing starting as low as 35 cents.
With the saturation of the U.S. market and the recession taking its toll on restaurants, the industry is concentrating more on the overseas market. Apart from India, Yum! operates Taco Bell restaurants in Canada, Puerto Rico, Guatemala, Costa Rica, Panama, Dominican Republic, Guam, Iceland, Philippines, Dubai, Spain and Cyprus. As of fiscal 2009, the company operated over 250 Taco Bell restaurants outside the U.S.
Louisville, Kentucky-based company, Yum!, plans to accelerate its expansion in India. The company, which currently operates about 158 Pizza Hut restaurants in 34 cities and 72 KFC outlets in 13 cities in India, plans to increase its total restaurant count to 1,000 by 2015.
The Indian market has been virtually recession-proof providing ample growth opportunities. Yum! plans to tap India’s organized food and beverage market, which is growing rapidly.
Yum!’s restaurants in India, which are managed by Niren Chaudhary, faces stiff competition from other fast-food chains such as McDonald’s Corp. (MCD) and Domino’s Pizza Inc. (DPZ).
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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